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Marco SabaThis is the unaddressed point: Seigniorage: The Honest Government's Guide to the Revenue from the Creation of Money http://leconomistamascherato.b......

14 hours ago
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Bank of England: Digital Cash – the end of monetary policy as we know it?

bank of england digital currency

Last week the Bank of England released a key paper that analyses the 'macroeconomics of central bank issued digital currencies'. The paper essentially asks what would happen if people could hold money electronically at the central bank, instead of having to use bank deposits (created by commercial banks). We wrote about it briefly last week but we're still working through the fine details of the 69-page mathematical model to figure out the implications for our work. In the meantime, the Bank of England's staff blog has just released a much more accessible discussion of the issues:

Vince RichardsonOK I ve no objection to that,far as I am aware that is what we all want.It has to be open and honest so everyone can see what is going on and where and how that money is created.Well in simple terms anyhow...

5 hours ago

Marco SabaAbout the fact that: first, the money created by the banks and BofE carry a seigniorage which is not returned to the HM Treasury; Second, by not recording properly this seigniorage in their own books, the banks are simulating a stressed situation asking for help from the same taxpayer victimized bef...

7 hours ago

Vince RichardsonDon't follow that sorry.The equity thing is as you say is mere accounting practice.The money can be created and spent into the economy ,which is the end product.How we get to that stage I care not.The BoE creates money (or helps the government destroy it)as is necessary ,what are you concerned about...

9 hours ago
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Our response to critics in the Cambridge Journal of Economics

Cambridge Journal Response

The Cambridge Journal of Economics (probably the leading journal of Post-Keynesian economics) has published an entire special issue on "Cranks and brave heretics: Rethinking money and banking after the Great Financial Crisis", inviting a range of academics to comment on proposals to stop banks creating money (amongst other ideas for monetary reform).

joebhedSorry, gang, stopping banks from creating money would indeed cause the economy to crash - if we leave it to these P-Ks to implement. But, rather, a monetary policy administered by a pubic authority empowered to create and issue the money would raise instead that valid, age-old stickler among public ...

3 hours ago

Vince Richardson""We argue that the reality of bank lending and firm investment is a challenge to this assumption and ignores the fact that the central bank can always create money to finance lending to the real economy"Not sure about this,surely we are about the state spending into the real economy?This lending bu...

3 days ago

ckmurrayHave you read about Australia's experience with the Commonwealth Bank which was a government owned central bank + retail bank in the early 1900s? https://en.wikipedia.org/wiki/...Seems very relevant to the issue of private vs public created money....

3 days ago
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Bank of England releases key paper on digital cash and blockchain

Screenshot 2016-07-19 13.36.01

The Bank of England has just released its most significant paper yet. Macroeconomics of central bank issued digital currencies, by John Barrdear and Michael Kumhof, discusses the consequences of the central bank making a digital form of cash available to the general public, so that they are no longer forced to use bank deposits to make electronic payments:

Dwain DibleyNo I don't have it mixed up, I'm correcting the LIE. Notes and coin in circulation is the money supply, everything else is debt, a promise to pay in notes and coin. The Fed is holding another $178-bln in notes as reserves, the rest of the reserves are securities that can be used by the Fed as coll...

10 hours ago

Gregory SchoenmakersYOU have it mixed up. You talk only about M0 money (notes and coins in circulation). However, base money also includes $2.3T in deposits by banks (the reserves).It is true that the Fed "borrows" the federal reserve notes from the treasury but this is largely an accounting device. It returns its surp...

14 hours ago

Dwain DibleyYou're confused.Legal Tender Statushttps://www.treasury.gov/resou...There is only $1.46-Trillion in U.S. "base money" legal tender in circulation around the globe.Federal Reserve Notes are owned by the U.S.G., the Fed is legally and financially liable for them....

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